* Flagging exports, fewer remittances feed deficit
* Foreign investment in stocks, bonds hit record high
MEXICO CITY Nov 23 Mexico posted a current
account deficit in the third quarter as a global slowdown
weighed on exports, but foreign investment in domestic stocks
and bonds jumped to a record high.
Demand for exports flagged in the quarter and Mexicans
living in the United States sent home less cash, leading to a
current account deficit of nearly $3.7 billion in
the July to September period, central bank data showed on
Friday. It was the first deficit since the 4th quarter of 2011.
The quarterly balance of payment data, which provide a
snapshot of Mexico's dealings with the outside world, showed
that exports during the quarter slipped 3.4 percent from the
second quarter to $91.243 billion.
The amount of cash sent home by Mexicans living abroad was
nearly 12 percent lower than in the same period last year at
"The deficit is basically reflecting the global slowdown,"
said Joel Virgin, an economist at Citigroup-unit Banamex in
Mexico City. "On the positive side, imports fell by a slower
pace, underscoring some strength in local demand."
Imports dipped 0.6 percent from the second quarter to $92.4
The pace of growth in the third quarter, but analysts
project the economy is still on track to grow close to 4 percent
Meanwhile, portfolio investment by foreigners rose to a
record high during the third quarter.
Central banks in the United States, Europe and Japan
committed to further monetary easing in the third quarter,
boosting the appeal of higher-yielding emerging market assets.
While growth in Latin America's No. 2 economy is slowing,
Mexico is still holding up better than other economies amid the
wider global downturn, which also makes local assets attractive.
Foreign investment in peso-denominated bonds rose to more
than $14 billion, while flows into the Mexican stock market and
locally issued corporate debt was $1.2 billion.
Total portfolio investment in Mexico by foreigners reached
$24 billion, boosted by a share offering of the Mexican unit of
Spain's Santander in New York, as well as
a $2.75 billion in debt issue by Carlos Slim's America Movil
Flows into local stocks have held up in the fourth quarter
as foreigners pumped $796 million more into stocks in October,
helping drive the IPC stock index to a record high, data on the
central bank's website showed.
The cumulative current account deficit was the
equivalent of 0.3 percent of gross domestic product, the central
bank said. Year-to-date, the current account recorded a deficit
of $2.6 billion.
Mexico's foreign reserves rose to a new record of $165.6
billion by the end of September.